Theoretical Foundation and Philosophy of Group of Companies as

Legal Entity

Try Widiyono

Faculty of Law, Islamic University of Jakarta

Keywords: Platform of Philosophy, Company Group, Legal Entity

Abstract: The Group of Companies or also referred to as the Holding Company is the strategy of the owner of the

company to expand the company's business which originally in a single company into several companies and

even into hundreds of companies that stand alone which are all directly and indirectly owned by the ultimate

share holder which is usually one family. Companies incorporated in the Company Group are limited liability

companies that are subject to Law Number 40 of 2007 concerning Limited Liability Companies. The Group

of Companies in Indonesia has not been recognized as a legal entity and has not been regulated by law, but

Bank Indonesia and the Financial Services Authority have regulated the Corporate Group for corporate

finance that regulates the Legal Lending Limit for companies compiled in the Corporate Group, and related

to the fit and proper test for the ultimate share holder. Based on the research using normative law method by

seeing the Company Group in terms of legal theory, namely the Legal Entity Theory such as the theory of

fiction (Fictie Theorie), Orgaan Theorie (organ theory), juridical reality theory (Juridische Realiteitsleer),

Wealth Together Theory (Propiete Collectief Theori) and the Theory of In-house Assets (ambtelijk

Vermorgen), it can be concluded that the Company Group can be given status as a Legal Entity. In connection

with the reality of the existence of the Company Group, and as a basis for the rights and obligations of the

Group Company as well as legal protection for various parties, it is time for Indonesia to have a law governing

this Company Group.

1 INTRODUCTION

Tri Budiyono (2011), appropriate business

studies and selection of business forms. The company

is vehicle for those behind the company as tools in

economic traffic for profit.

The current forms of the company have

grown rapidly from the former in the form of:

1. Civil partnership (maatschaap),

2. Comandeter Venotschaap (CV),

3. Firms,

4. Limited Liability Companies,

5. Cooperatives,

6. Pension Funds, and

7. Now have developed the Group of

Companies.

Entrepreneurs have developed a single

company into a Group Company. For example, the

company groups are:

1. Bakrie Group,

2. Gudang Garam Group,

3. Djarum Group,

4. Humpuss group,

5. Medco Group,

6. Sungai Budi Group,

7. Gudang Garam Group,

8. Kompas Group,

9. Bimantara Group,

10. Sampoerna Group,

11. Maspion Group,

12. Mayora Group and others.

Overseas company groups such as Axa Coca

Cola, Unilever, Samsung and others. Even though the

Company Group has been developed very rapidly,

there are no rules that can cover the Company Group.

Based on the background above, problems

can be formulated:

 How is the Company Group seen from legal

entity theory?

 How should the law provide legal certainty

for the existence of the Company Group?

2378

Widiyono, T.

Theoretical Foundation and Philosophy of Group of Companies as Legal Entity.

DOI: 10.5220/0009943023782382

In Proceedings of the 1st International Conference on Recent Innovations (ICRI 2018), pages 2378-2382

ISBN: 978-989-758-458-9

2 RESEARCH METHODOLOGY

Legal information presented in this study is

based on the results of normative legal research. Peter

Mahmud Marzuki (Marzuki p. 35, 2007) stated that

"a process to find legal rules, legal principles, and

legal doctrines in order to answer legal problems

faced”.

The legal problem or questions raised are

how is the company group seen from the legal theory

of legal entities? And the second question is how

should the law provide legal certainty for the

existence of the Company Group?

The legal issues mentioned above, will be

discussed in more detail to find legal norms that

should be formed. So, this research can provide the

legal solutions to the legal issues that have been

mentioned above.

3 DISCUSSION

The company group is a set of one or more

companies that stand alone as legal subjects, where

one of the companies functions as a holding company,

even though the company group does not always have

a holding company. But from all business entities in

the group the company is controlled and owned

directly or indirectly by certain people.

A person or certain party who controls and

controls most of the shares in the company group is

called the ultimate share holder (Widiyono p. 147,

2015). Munir Fuady argued that the point is that

through an economic approach, a company group has

a parent company and a subsidiary which is an entity

(Fuady p. 134, 1999).

Discussion of group companies is actually

bigan of the theory of subject of law i.e. everything

brings rights and obligations. The theory of this law

agency divides subjects other than those laws i.e.

legal entity. Despite the fact that behind the Agency

inform land there are people that are running the real

operational and legal actions in the traffic law. So,

including behind a holding company is a "person" as

a subject of law, although it is also a legal entity in

question remained personified as a subject of law.

The sense of the people in this case is

"personal physical". This is to distinguish between

the existence of the subject of another law as "private

law" or "legal entities. Human being has rights and

obligations which have the sense that the legal norms

regulating human action in question through a certain

way. Norm applies to humans called such personal,

not be automatically applicable to the physical it's

personal.

A discussion of the theory of subject of law

was the beginning of a discussion of the theory of

agency law. As a means of amalistis in see Group

company as agency law. Understanding of the theory

of subject of law and theory of law bodies become

very important, to provide a theoretical foundation

and skepticism in dissecting the group company as a

legal entity. This is necessary in order to provide

input in the later changes to the Act No. 40 year 2007

regarding limited liability company that has yet to

enter a group.

Law No. 40 of 2007 concerning Limited

Liability Companies is still based on a single

company. The change in a single company so that it

becomes a group of companies is an implication of

changes in corporate strategy. To see the Company

Group as a legal entity or not a legal entity, an

analysis of some legal body theory is needed as

follows:

3.1 Fiction Theory (Fictie Theorie)

The theory of fiction (Fictie Theorie)

proposed by Frederich Carl von Savigny, that a legal

entity is a symbol of a collection of parties

(aggregates) related to the legal entity (Budiyono

p.21, 2011). Satjipto Rahardjo, stated "In addition to

humans, the law still makes fictitious constructs

accepted, and is treated and protected like humans.

The law is free to decide what was created that

originated from his imagination. Furthermore,

Satjipto put forward a legal entity created by law, so

his death is also determined by the law (Rahardjo p.

74&110, 1986).

This theory suggests that being a legal subject is

human, but humans imagine legal entities are legal

subjects like humans. Human as a subject of law is

the bearer of rights and obligations. Therefore a legal

entity formed by human beings as human-like. Thus,

the legal entity as the subject of law as well as the

bearer of rights and obligations. However, as a result

of the creation of man, then the law could do the

subject of legal action being represented by its

administrator.

Therefore, the company group can become a

shadow (fiction) as a legal entity, because the group

of companies is a symbol of a group of parties

(aggregates) associated with the legal entity. Group

of companies as an organization can be granted rights

and obligations also by law as human beings.

Theoretical Foundation and Philosophy of Group of Companies as Legal Entity

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3.2 Theories of Real Organisms or

Theorie van de Organische

Rechtspersoonlijkheid

Polano Z.E reacted and stated that the legal

entity was there. Legal entities are not fiction but they

are true. A legal entity is not a subject-less property,

but a real organism, which lives and works like a

human (Budiyono p.23, 2011). The purpose of the

legal entity is to be collective, regardless of the person

behind it. So, every meeting is a legal entity.

This theory is more real and general all society

is a legal entity. Because all associations have the

intention, effort and collective goals of different

human groups with the intention, effort and goal

individually. Humans grouped themselves in an

Assembly must break away from personal goals.

Although each of the humans who gathered in the

Assembly has the same slices about the intent and

purpose of the effort of all the people who gathered in

the Assembly. The same the slivers incarnate

becomes common purpose.

Based on this theory, a group of companies

is a compendium of companies that stand alone as a

legal subject, which is independent of the parties

behind it. The parties are the ultimate shareholder and

therefore the company group can be given status as a

legal entity.

3.3 Juridical Reality Theory

(Juridische Realiteitsleer)

The foundation of this theory is Paul

Scholten who argues that the legal entity is real and

concrete even though it cannot be held, it is not

fictitious but a realistic juricshe (juridical facts /

facts). This theory is needed because for the sake of

legal traffic. Therefore, for the sake of the legal

traffic, the Company Group can be given status as a

legal entity.

This theory operates on the more juridical facts

which indeed in society there is a body of law that is

required by humans in traffic law. The human body

requires the law because human beings as social

animals that have a tendency to group which was later

transformed into a legal entity. In the body of law that

human beings have the collective interests of

mankind are gathered in a legal entity. Therefore, the

law is the juridical reality.

Therefore, the group of companies is part of

juridical development innovation legal company.

Group of companies is human needs over the

desertification efforts previously chained in a single

company. Juridical interests against the existence of

the Group companies for the limited purpose and

limited liability business which is a sole company.

With a group of the company, then the human need

for control of various kinds and economic effort to be

open. Therefore, the Group of companies is a juridical

fact required by human beings to obtain adequate

legal protection.

3.4 Shared Wealth Theory (Propiete

Collectief Theori)

Rudolf von Jehring followed by Planiol that

the legal body was not an abstraction and not an

organism, but all its members together had an

eigendom, shared responsibility, rights together.

Theory is viewed as a legal entity rights and

obligations separate from personal private.

The existence of the legal entity, then the

rights of individual beraleh be shared rights and

obligations of legal entities established by such

persons. Thus legal entities also have a shared

treasure of those who set up a legal entity. The wealth

of legal entities be separate with the kekyaan of the

parties gathered in the body of the law

If this theory, associated with the existence

of a company group, the joint wealth of the company

group is the ultimate share holder. In the Group the

company the wealth ultimate share holder be apart

with a wealth of group companies. Group company

has the right and duty as well as the responsibility of

its own separate from the ultimate share holder

3.5 Theories of Occupational Assets

(Ambtelijk Vermorgen)

This theory was developed by Holder and

Binder with his follower, FJ. Oud. This theory argues

that without the will (wilsvermokgen) does not exist

as a legal subject and the one who has the will is the

administrator (Budiyono p.23, 2011).

Therefore, the right to be attached to the

position as administrator is manifested in the

company's articles of association. With regard to the

owner company group that wishes is the ultimate

shareholder.

The company group is real, even Bank

Indonesia and the Financial Services Authority have

regulated that in Article 1 paragraph (4) PBI No.14 /

24 / PBI / 2012 concerning Sole Ownership in

Indonesian Banking has regulated this matter. The

provisions of the PBI limit the holding company

(Holding company) in the world of Banking (Bank

holding Company) is a legal entity that is formed or

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owned by the Controlling Shareholders to consolidate

and directly control all activities of the banks that

become subsidiaries.

Article 5 paragraph (2) provides

confirmation that the Holding Company (Bank

Holding Company) can only carry out investment

activities, which include management services in

order to improve the effectiveness of consolidation,

business strategy, and financial optimization of

controlled business groups. Explanation of Article 2

paragraph 1 gives the understanding that Ultimate

Share Holder is a Controlling Shareholder up to the

last owner and controller who is required to do a fit

and proper test.

4 CONCLUSION

Based on the theories stated above, it can be

argued that the company group is clearly present, not

fictitious and is required in legal traffic. Company

group has joint assets and has the will represented by

the owners of the company group namely ultimate

share holder.

Group of companies is a juridical reality

needed in traffic law to meet human needs to

menguassai more economic factors that were

previously not possible in the limited liability

company is the sole company. Limited liability

company has the intent and purpose of the effort is

limited and limitative. With the group the company

then became open to human beings have different

types of venture through, these are controlled by the

holding company. Even within the group of

companies can have the kind of sja and effort as well

as the same objective and consists of many limited

liability company under the control of the holding

Therefore, it is possible for the Company

Group to be given a star as a legal entity. As for each

company that meets in the company group can be

given the status of a unit that has its own business

field. Discussion of group companies is actually of

the theory of subject of law i.e. everything that brings

the right and obligations.

The theory of this law agency divides subjects

other than those laws i.e. legal entity. Despite the fact

that behind the Agency inform land there are people

that are running the real operational and legal actions

in the traffic law. So including behind a holding

company is a "person" as a subject of law, although it

is also a legal entity in question remained personified

as a subject of law.

The sense of the people in this case is

"personal physical". This is to distinguish between

the existence of the subject of another law as "private

law" or "legal entities. Human being has rights and

obligations which have the sense that the legal norms

regulating human action in question through a certain

way. Norm applies to humans called such personal,

not be automatically applicable to the physical it's

personal.

A discussion of the theory of subject of law

was the beginning of a discussion of the theory of

agency law. As a means of amalistis in see Group

company as agency law. Understanding of the theory

of subject of law and theory of law bodies become

very important, to provide a theoretical foundation

and skepticism in dissecting the group company as a

legal entity. This is necessary in order to provide

input in the later changes to the Act No. 40 year 2007

regarding limited liability company that has yet to

enter a group.

5 SUGGESTION

In Indonesia there is no law that regulates

the group companies, although clearly the company

Group has existed and developed rapidly. Therefore,

to provide legal protection to all parties related to this

company group, it is necessary to regulate the status

and position of the company group.

In the world, lending and / or financing are

obliged to pay attention to the group of companies,

both in terms of the Legal Lending Limit (LLL) and

related to ultimate shareholders as the top owner in

the company group. There are 3 (three) aspects,

namely:

1. Financial linkages (consolidation balance),

2. The relationship between management, and

3. Ownership relationships.

This arrangement is also to balance the sense

of social justice, namely to limit the accumulation of

wealth and the exploitation of nature and all forms of

business from upstream to downstream are controlled

by just a few people.

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